What is a customer data platform? Data & Reporting by TAYLOR COTTER February 18, 2021 How do you learn about your customers? If you’re like most marketers, you can rattle off a dozen ways off the top of your head. Ads, click-through rates, blog comments and Facebook likes, and industry research begin to scratch the surface. What about sales calls and customer success touch points? How about their deal size, billing cycle, or even their company holiday card? To create a full picture of your customer, you have to gain customer insights from every angle. The easiest and most complete way to do this is by using a customer data platform. What is a customer data platform? According to the CDP Institute, a customer data platform is packaged software that creates a persistent, unified customer database that is accessible to other systems. This means: A customer data platform must be a single software, not a combination of products. A CDP must export a persistent, unified customer database, not a fragmented system. A CDP must be accessible to other systems, not a standalone export. How is a CDP different from a CRM? But wait, what about your CRM? CRMs, or customer relationship management systems, have become integral to revenue operations. They provide invaluable insight into your customers. Further, they integrate with marketing, customer service, and financial programs. You may even use a unified CRM, which puts many of these integrations into one central system. Here’s how a customer data platform differs from a customer relationship management system. CDPs are managed by marketers This is unlike a CRM, which is managed by a sales operations manager or a system administrator. A digital marketing manager or analyst can manage a customer data platform. CDPs are not used to manage customers A customer data platform is not used to send emails, make calls, or market to customers. Instead, it analyzes things that have already happened. CDPs go above & beyond the CRM A customer relationship management system is a great data resource. But, it is not the only data resource. A CPD can enhance CRM data with marketing, service and financial information as well. Your customer has a story before and after they become a data point. A customer data platform helps your digital marketing team tell that story, without gaps. What kind of data does a CDP collect? The customer data platform should collect customer insights at every touch point to provide a 360 degree view. Here are some examples of the types of data a CDP might collect: Web data Tools like Google Analytics document your customers’ web behavior. A customer data platform can aggregate links clicked, time on page and bounce rate. Combining this with other customer data can show meaningful trends in user behavior. Customer identifiers Your CRM integration will enhance your customer information. With a robust CRM, you can use identifying information to segment customer profiles. Data like names, birthdays and addresses creates fuller pictures of your customers. Customer histories Has your customer been around for six years or six months? Are they paying six figures or on a six-week free trial? This sales information, also in your CRM, profiles customers by their purchasing behavior. Email or social media engagement Who are the customers who like everything you post on Facebook, but never upgrade? What about those who haven’t opened a marketing email in over a year? These digital marketing analytics are powerful when aggregated with your other customer metrics. Customer service data You can learn a lot about a customer when studying how they use your customer service. Combining data from live chats, phone calls, and emails shows customers’ behavior over time and likelihood to churn. Financial information At the end of the day, you want to know what customers are purchasing, and for how much. A customer data platform shows lifetime value and total investment into your customers, including acquisition. Benefits of using a customer data platform Marketing bridges the gap between your customer and your product. Marketers typically understand their product extremely well. Why shouldn’t you understand your customer at the same level? Benefits of a customer data platform include: Campaign optimization to suit your customer profile A customer data platform shows you which campaigns resonate with your customers. With this information, you can segment your marketing programs to meet customer needs. Improving your sales cycle With integrated marketing and sales data, a CDP can identify blockers in your funnel. This information allows you to smoothly move customers from marketing to sales. Identification of customer correlations Say you have a hunch that organic customers are more likely to contact customer support. A CDP can prove you right—or wrong. These correlations let you find alignments in your marketing, sales, and support functions. Reintegration of customer data into other software Customer data platforms integrate both ways. So, your marketing and sales software can use CDP data to improve your day-to-day functions. Driving revenue Better customer understanding = better marketing = better revenue. Using a customer data platform to improve your marketing How, exactly, does better customer understanding lead to better marketing? Here’s how a CDP can impact the success of your marketing campaigns. CDP shows which channels bring in the most revenue A CDP will draw a direct line between your marketing channel and lifetime revenue. You can invest more in the channels that are high revenue-drivers, and retire those that aren’t. This will increase your marketing ROI and decrease your customer acquisition cost. CDP helps to improve your product marketing Product marketing helps your customer better understand your company and product. A CDP uses your data to show customer touchpoints, pain points, and decision cycles. You can incorporate this information into segmented product marketing materials. Create better segments with complete visibility We all know digital marketing isn’t one-size-fits-all—it’s meant to be humanized. Our campaigns and programs work best when we tailor them to fit our customers’ needs. With a customer data platform, you can create more specific customer segments. With fewer assumptions, these segments are more accurate, measurable, and effective. Conclusion A customer data platform is a great tool to better understand your target audience. The insight into the entire business can be transformative for marketing success. If you are a marketer looking to better understand your customer, consider adding a CDP to your tech stack. Interested in learning about Insightly’s unified platform for customer data management? Request a demo and see how you can better manage your customer data, align teams, and build stronger customer relationships. Request a demo Sources: 4 Types of Customer Data to Enhance Your Marketing Campaigns. Rob FitzGerald. ConnextDigital. June 20, 2019 8 Benefits of a Customer Data Platform (CDP). Jan Hendrik Fleury & Clemens Niekler. Crystalloids. October 7, 2019 Customer Data Platform Basics. Customer Data Platform Institute. 2021 Customer Data Management | Marketing KPIs | Sales & marketing alignment | Unified CRM TAYLOR COTTER Taylor Cotter is a content marketer and social media strategist who has worked with leading B2B software companies to increase their reach and exceed their customer acquisition goals. Taylor is passionate about marketing that sits at the intersection of creativity and functionality. You can learn more about her at taylorcotter.com or connect with her on LinkedIn.
